If you don't use morale, and have a system for it, then the players can and often are disconnected from their character and will do things that clearly no sane sentient person would do. There has to be a system to keep their actions in check, so they play "in character" rather than like they are in some FPS game and don't particularly care if they are wounded or die. NPC's are subject to the same system in the same manner.
I also have a system that covers longer term morale. That is, if the player keeps putting their character in messed up situations where they are treated poorly, abused, or subject to horrible conditions, the character can suffer negative consequences eventually.