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Classes which are arranged in a circle make quite a strong statement about what the teacher and the students believe in. With all the people in the room sitting in a circle, there is a far greater feeling of equality than when the teacher stays out at the front. This may not be quite so true of the horseshoe shape, where the teacher is often located in a commanding position, but, even here, the rigidity that comes with orderly rows, for example, is lessened.
With the horseshoe and circle seating, the classroom is a more intimate place and the potential for students to share feelings and information through talking, eye contact or expressive body movements (eyebrow-raising, shouldershrugging, etc.) is far greater than when they are sitting in rows.
(Harmer, J. The practice of English language teaching. 2007)