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I have been playing The Last Remnant for a little while now and I am stumped. From what I, understand my formations directly affect my morale depending on what creatures I am fighting, but I am not sure how to figure out what formations are good against what guys.

Does anyone have any advice?

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The formations your individual unions adopt do not matter for morale. You can read what causes morale changes here.

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I know why moral changes during the course of battle, my question is, why is my moral so low at the beginning of the battle? –  Scottttie Apr 22 '13 at 18:10
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Because the enemy is stronger than you. If you are stronger than the enemy, you will have a morale advantage at the beginning of battle. –  kotekzot Apr 22 '13 at 20:29
    
Exactly what kotekzot is saying. The starting morale is all based on how the strength of your units compares to your enemies.In reverse if you go back to an earlier area you'll most likely have a big morale advantage when you start since you should be stronger than those enemies. –  A.C.M. Apr 23 '13 at 3:49
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