Morale
The old saying, "the best defense is a good offense" is clearly true in the AD&D game.
And the best way to avoid suffering damage is to beat the foe so badly he wants to crawl under a rock or, better yet, run away. That's where morale checks come in.
The gnoll in front of Beornhelm smashes a mace against the fighter's shield, just as the searing heat of lightning clips all the hair on the side of his head. Instantly, the heat is followed by the booming thunderclap in his ear. All the while, some vile little creature is trying to gnaw on his shin! It's really enough to ruin an adventurer's day. But, Beornhelm is cool, calm and in control--because the player running him says so. The same can't be said for the monsters.
In almost all situations, players should be the ones who decide what their characters do. A DM should never tell a player, "Your character decides he doesn't want to get hurt and runs from the fight," unless that character is charmed and therefore controlled by the DM.
A suggestion that a character might want to retreat, advance, open a chest, or whatever, is all right, but a DM shouldn't force a player character to do something by simply insisting. Only under the most unusual circumstances--charm, magical fear, or other forced effects--should the DM dictate the actions of a player character.
Monsters and NPCs are an entirely different matter, however. The DM makes their decisions, trying to think like each creature or non-player character, in turn.
In combat, thinking like a creature mainly means deciding what actions it takes and how badly it wants to fight. As a general rule, monsters and NPCs are no more eager to die than player characters. Most withdraw when a fight starts to go badly.
Some panic and flee, even casting their weapons aside. If they think they can get mercy, brighter foes might fall to their knees and surrender. A few bloodthirsty or brainless types might fight to the death--but this doesn't happen too often. These are the things that make up morale, things the DM must decide, either through role-playing or dice rolling.
The Role-Playing Solution
The first (and best) way to handle morale is to determine it without rolling any dice or consulting any tables. This gives the biggest range of choices and prevents illogical things from happening. To decide what a creature does, think about its goals and reasons for fighting.
Unintelligent and animal intelligence creatures attack and most often for food or to protect their lair. Few ever attack for the sheer joy of killing.
Those attacking for food attack the things they normally hunt. A mountain lion, for example, doesn't hunt humans as a rule, and it doesn't stalk and attack humans as it would a deer. Such creatures normally allow a party of adventurers to pass by unhindered. Only when the creature is close to its lair does the chance of attack come into play. Animals often fight to protect their territory or their young.
When they do become involved in combat, animals and other creatures rarely fight to the death. When hunting, they certainly try to escape, especially if they are injured. Their interest is in food. If they can't get it easily, they'll try again elsewhere. Most often, it is only when pressed, with no avenue of escape, or perhaps when its young are threatened,that an animal will sacrifice its own life.
Of course, in an AD&D game, a creature can attack and fight to the death when that will make for the most drama and excitement. For example, say a group of characters spot a grizzly bear blocking the path ahead of them. Instead of wisely waiting for it to shamble off, the party foolishly puts some arrows into it. Enraged, the beast attacks the party with berserk fury, causing serious harm and teaching them an important lesson before it dies.
Intelligent creatures have more complicated motivations that the need for food and shelter. The DM decides what the creatures want. Greed hatred, fear, self-defense, and hunger are all motivations, but they are not worth dying for. As a guideline for intelligent creature and NPC motivation, consider the actions of player characters. How often do they fight to the death? Why would they? At what point do they usually retreat?
Certainly, NPC adventurer parties should behave similarly to player characters. After all, their concerns are much the same as those of the player characters--getting cash and improving themselves. They are not very interested in dying.
On the other hand, members of some fanatical sects may willingly sacrifice themselves for the cause. Even so, a few have been known to reconsider at the last minute!
The morale of NPCs and intelligent creatures should also jibe with known facts about his, her, or its personality. If an NPC with the party has been portrayed as cowardly, he probably won't willingly march into the jaws of death. One noted for his slavish loyalty, on the other hand, might stand his ground, dying to protect his friends or master. There are many choices, and the AD&D game works best when a person, not the dice, makes the choice.
Dicing for Morale
Sometimes there are just too many things going on to keep track of all the motivations and reactions of the participants. For these times, use the following system to determine the morale of the creature or NPC. Never use this system for a player character!
First, do not check morale every round of a combat. Aside from the fact that this slows everything down, it also crates unbalanced and unrealistic battles. Everyone going into a fight expects a little danger. Only when the danger becomes too great should a morale check be rolled. Just when the DM rolls morale checks is a matter of judgment, but the following guidelines should prove useful.