The current model is fine but needs some fine-tuning.
Org loss should be based on distance of the new command from nearest HQ or the previous command. Say 1/2 for "long" distance (Moscow->Stalingrad), 1/4 for "medium" distance (Paris->Dunkirk), and 1/8 for "short" distance (Alsace->Lorraine). Add another penalty of 1/3 for the "acclimation" phase that will recover over 1 month. So it will be disastrous to swap out leaders in faraway expeditionary forces, but strategize with HQ placements and you'll do fine.