Is it really necessary to have rules for morale? I would think that based on the particulars of a situation and the intelligence/personality/whatever of the monsters or NPCs, a DM should be able to adjudicate how they would react. An iron golem, for instance, is likely to fight until destroyed, while an orc that just saw his nine buddies get fried is likely not to stick around to see what would happen to him. If someone could truly go either way, flip a coin. Granted, any rule could be handled "manually" by the DM, but it always felt like the morale rules were unnecessary and slowed things down.
I ignored the morale rules in 1e/2e and simply decided what something would do based on what it was and was kind of situation it found itself in.