Morale is an attribute of Empire Earth that can allow one player to make his units significantly more powerful by exploiting House and Warrior Heroes. As a strategic element of the game, it's important to know how it works.
Each morale point a unit has decreases the damage they take from enemy units by approximately 10%. So a unit with one point of morale being attacked by a unit with 20 attack takes only 18 damage, one with two points of morale takes 16, one with three takes 14 and so on.
The morale a unit has is indicated by the green dots at its feet. The number of green dots indicates the number of morale points, from one to five.
As indicated in the manual, morale can be attained in two ways. The first is by building House. A single house in the area of influence of this Town Center grants all units within that same area one morale point. You can determine the area of influence of a Town Center or Capitol by selecting the building and looking for the green and blue flashing line that forms a square some distance out. All units in this area receive the morale bonus the House gives.
Likewise placing two House will give two morale points. A Town Center's area of influence will give a maximum of two morale points on tournament mode, and four morale points on standard mode. You can build more House than the game mode supports, but the morale level will stay the same until you build a Capitol, no matter how many House you build.
A Capitol can support two more House than a Town Center, on tournament mode that is up to four House and on standard mode up to six House. These in turn distribute up to four or six morale points to all units within it's area of influence. Additionally, the Capitol has a a larger area of influence than the Town Center, and thus affects more units.
If two Town Centers or Capitols have an area of influence that overlaps, House will only contribute to both, but the morale of two town centres/capitols near each other is not cumulative. Nor is a Warrior Hero's morale cumulative on that provided by House.
Morale also affects Towers, in a way. Towers built within the area of the influence of a Town Center or Capitol have the equivalent of 5 morale points, and thus they take half the damage they would ordinarily. Towers are not affected by House but this bonus is in place whether you have House or not.
The second way to provide units with morale is by using a Warrior Hero. Heroes are built at a Town Center or Capitol from the Copper Age onwards, and come in two varieties; Strategist Heroes heal units around them and have the ability to temporarily weaken a group of enemies, Warrior Heroes are tougher combat units and give morale to units around them. You can only train one Hero at any given time during the game, and you can't train another until that one meets its demise.
The Warrior hero has a range of around 6 tiles laterally and four tiles diagonally. They provide the same amount of morale in both standard and tournament mode, five points; enough to reduce damage to all surrounding units by 50%.