Normally, when entering dangerous missions (combat) or encounters; Units become war-weary and will gradually sustain penalties to morale rolls.  Orcs NEVER suffer this penalty.  Even one, single Orc unit sent to fight a Dragon will not suffer any morale penalties or combat-penalties; they are simply too stubborn to be afraid.  They can still flee a fight as a result of normal combat (but, never with a penalty to the roll: the +5% morale bonus always applies as well.)

What triggers the 'Dangerous Mission Penalty' (hereafter: DMP)?

1) Fights with Legendary Foes (lasts 1 week)
2) Any time a Unit is forced to make a Morale Check
3) Any time a Unit witnesses a comrade flee or be destroyed.

The above items alone will only cause a SINGLE instance of DMP per Combat.

Other Triggers

1) If a Unit flees, but then later partially succeeds at a Loyalty Check.
2) If a Unit continues to be involved in further combats (on subsequent rounds.
3) If your forces are forced to flee; the entirety of your forces receive one instance of DMP.

With the exception of defeating a legendary foe, the effects of DMP last for 2 (two) weeks.