Aside from the offensive capabilities as well as the number of your troops, you must also pay attention to their physical and mental state. Even the most powerful units won't be of much use when they are exhausted and terrified. You must pay attention to their leadership and fatigue.
Each unit has its own leadership value, which is basically the equivalent of the morale of a squad. The higher the value, the more resistant the unit is to the stresses of the combat - fleeing or dying companions, terror caused by some of the units on the battlefield, quantity advantage and so on.
The discipline of the unit is represented by a white horizontal bar located underneath the health bar of a unit. If it's full the unit is fully disciplined, is fighting with its full potential and its quite resistant to stress. If the encounter is not going in the units' way (when the unit is surrounded by enemies, there's a powerful unit causing terror in the area, or when its Lord dies or is wounded) the discipline will gradually decrease. If the bar is emptied the unit will route from the battlefield and you will lose control over it.
If the unit is not chased by enemies you will regain control over it after a few seconds. Don't send it into the battle just the second you can control it as the discipline bar is almost empty and the unit will run away as soon as it notices the enemy. Instead wait for a moment for the bar to fill in and send it to the battle - doing so will allow your unit to get back into the game. If, however, the unit is chased by the enemy, or its morale broke a number of times, the unit will run away from the battlefield and you will lose it permanently.
To maintain a high level of discipline of your units you can use:
- The neighborhood of allied units. If the flanks of the unit are secured and there are allied units located there the unit will receive a huge boost to the discipline and will be a lot harder to break.
- A Lord located nearby. Each Lord increases the discipline of nearby allied units. This bonus can be increased by unlocking some passive abilities, and some active abilities can even cause the routing unit to get back into combat by filling the entire discipline bar, or by causing the unit to be unbreakable for a short while (the discipline bar won't be decreasing during the duration).
- Keeping units with low discipline from contact with units that cause terror. Those units should be taken care off with your Lord, with units with extremely high leadership, or taking it off from afar.
Another thing that influences the effectiveness of units in combat is their fatigue. All of your units start most encounters while well rested - they will be able to fight with their fullest potential. Additionally, well rested units can move around the battlefield very quickly.
Over the course of the encounter all of the units, both yours and the enemy ones will gradually get tired. At first this only serves as an indication that the enemy is getting tired - it won't have a real impact on their capabilities. The problem appears when the unit is very tired, or exhausted. Units fighting in melee will have problems keeping up with rested enemies, missile units will take longer to reload, and the cavalry won't be able to perform effective charges.