It's just simulated battles and retreat efficiency except for some perks, such as logistics expert(I believe) and one step ahead(not working) which -should- give archers 20% more ammo and allow the deployment of troops before battle.
I learnt this from another MB forum, didn't know if it's actually that way. I would like to test it out, whereas it seems impossible to test. But still tho, this is like the pre-alpha test now, I bet TW would add in detailed tutorial on how skill/perks work for the definitive version.
I thought this was based on your leadership perks and leadership level along with current morale level based? Some troops being slow to react to order or just straight up ignore an order....